Latest Stories

Google Starts Taking Heat

As I said yesterday, Google’s offering looked controversial right away, from its dual-class share structure to its preachy “Google knows best” opening letter. Here are the opening paragraphs of my Saturday National Post column on the subject:

An IPO filing replete with palpable distaste for shareholders and markets, with share shenanigans to maintain control, and with principals and venture capitalists with oodles of stock poised to sell – it sounds like a replay of 1999.

But it isn’t. Instead it is Google’s new public offering, and while most observers are too busy oohing and aahing at the fireworks to notice, the document is over-arrogant and an unnecessary thumbed-nose at capital markets.

And I am not the only one. Here is the opening of Steve Bailey’s Boston Globe piece from today’s paper:

“Google is not a conventional company. We do not intend to become one.”

Two sentences into the letter Google’s two founders wrote to all those potential investors panting to get a piece of maybe the most highly anticipated IPO in history, and I am already gagging. Hey, I love Google, too, but maybe Mom and Dad (or their investment bankers, at least) should remind Larry Page and Sergey Brin of one thing: Like many smart people who came before them, they are running a company. They are not saving the world.

Comments

From Dan Gilmour:
…
First, Page and Brin told Wall Street’s investment banks that, at least for this initial public offering, there would be none of the corrupt, crony-enriching games that ripped off companies and investors alike during the worst days of the Internet bubble.
This time, the founders said, the company would sell shares to the public via an auction. This time, the investment bankers couldn’t set an opening price on a high-demand stock and offer lots of shares to business associates and big clients who could then flip them at higher prices in the public markets. This time, the company going public would make the money.
Second, Page and Brin told prospective shareholders, they won’t bow to the tyranny of Wall Street’s short-term expectations. To accomplish this, the founders will structure the ownership to ensure their continued voting control.
The S-1 made clear that Google is more of a media company, selling advertising to make money, than a technology company. Not coincidentally, Page and Brin specifically cited three media companies with two-tier stock ownership — the owners of the Washington Post, Wall Street Journal and New York Times — as examples of companies that invest for the long term while resisting Wall Street’s insidious short-term fixation.http://weblog.siliconvalley.com/column/dangillmor/archives/010323.shtml#010323